We are seeing more conditional sales falling apart due to mortgage approval being denied by either the lender or mortgage insurer. Buyers who thought they would have no problem being approved and did not go through the formal pre-approval process with their bank or mortgage broker before making an offer, were surprised when given the bad news that they were not approved for the mortgage. This is problematic on various fronts and can be avoided.
When a buyer begins working with a Realtor to help them find and purchase a property, there is a lot of time and effort invested by the Realtor as well as the buyer. Once an offer is made and accepted the listing Realtor and seller are investing their time and effort and in the sellers case, taking their home off the market during the conditional sale period. When a sale falls apart due to the mortgage not being approved, everyone loses.
Listing Realtor’s have been asking from time to time in the past if the buyer is pre-approved when receiving an offer, but now it happens every time. The buyers Realtor must work in their clients best interest by helping the seller and their Realtor agree to work with and accept the buyers offer. If the buyer has not been pre-approved and has made an offer and the listing Realtor finds out, there is almost zero chance the seller will work with that buyer and their offer.
The most important weapon a buyer can have in today’s market is a pre-approval letter from their bank or mortgage broker. This shows the buyers Realtor, listing Realtor, & seller that you have taken the first step in showing you are a serious buyer ready to make a deal. Trust is paramount for all parties in a real estate transaction. Without trust, it is hard to get anything done.
Most buyers think finding the property is the first step in the process when in fact it is getting a mortgage pre-approval. Knowing what you can afford, how much per month it will cost, selecting the right mortgage product, & showing that you are a serious buyer is extremely important and a must first step.
If you are in the market, or are thinking of getting into the market and have not gone through the mortgage pre-approval process, do it ASAP!
If you have any questions or need help with a mortgage pre-approval let me know and I will be happy to help out.